Correlation Between Beerenberg and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Beerenberg and Sparebanken Ost at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Beerenberg and Sparebanken Ost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beerenberg AS and Sparebanken Ost, you can compare the effects of market volatilities on Beerenberg and Sparebanken Ost and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Beerenberg with a short position of Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beerenberg and Sparebanken Ost.
Diversification Opportunities for Beerenberg and Sparebanken Ost
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beerenberg and Sparebanken is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Beerenberg AS and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost and Beerenberg is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Beerenberg AS are associated (or correlated) with Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Beerenberg i.e., Beerenberg and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Beerenberg and Sparebanken Ost
Assuming the 90 days trading horizon Beerenberg AS is expected to under-perform the Sparebanken Ost. But the stock apears to be less risky and, when comparing its historical volatility, Beerenberg AS is 5.94 times less risky than Sparebanken Ost. The stock trades about -0.12 of its potential returns per unit of risk. The Sparebanken Ost is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,380 in Sparebanken Ost on September 1, 2024 and sell it today you would earn a total of 130.00 from holding Sparebanken Ost or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beerenberg AS vs. Sparebanken Ost
Performance |
| Timeline |
| Beerenberg AS |
| Sparebanken Ost |
Beerenberg and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beerenberg and Sparebanken Ost
The main advantage of trading using opposite Beerenberg and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beerenberg position performs unexpectedly, Sparebanken Ost can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sparebanken Ost will offset losses from the drop in Sparebanken Ost's long position.| Beerenberg vs. Sparebanken Ost | Beerenberg vs. Skue Sparebank | Beerenberg vs. Polaris Media | Beerenberg vs. Clean Seas Seafood |
| Sparebanken Ost vs. Shelf Drilling | Sparebanken Ost vs. Odfjell Drilling | Sparebanken Ost vs. Nordic Semiconductor ASA | Sparebanken Ost vs. Lery Seafood Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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